Reuters adds,"At Wright's rented home, a modest brick house in the leafy middle class suburb of Gordon, three police workers wearing white gloves could be seen searching the garage, which contained gym equipment. A man who identified himself as the owner of the house, Garry Hayres, told Reuters that Wright and his family had lived there for a year, and were due to move out on Dec. 22 to move to Britain. Hayres said that Wright had a 'substantial computer system set-up' and had attached a 'three-phase' power system to the back of the house for extra power."

Could not possibly be. There's a lot of words used to describe the federal police, but fast is not one of them. Raiding a house literally hours after news broke on some internet magazine? If the government actually possessed that kind of efficiency we would have solved all the world's problems by now.

Well, governments are good at moving when it involves money coming their way. Witness red light cameras, how quickly meter maids spawn out of thin air, and how fast they garnish your wages. But you try to get money out of them, or another private citizen, and all of a sudden it's like trying to squeeze water out of a brick.

Kinda makes me wonder about that initial founding block of bitcoins that has never been used, and if this person has necessary information to actually access that block, what the legal issues for that would be for both him and for that initial unused block. Some have cited that block as part of the reason why bitcoin is reasonably stable, but if that block now somehow became Australia's property and if they chose to start spending it, what that would do to the scrip.

Kinda makes me wonder about that initial founding block of bitcoins that has never been used

BTC clients don't allow transactions against the genesis block (#0). Originally this resulted naturally from the the way the client inserted transactions into the local database (often called a bug, but possible done by design to address exactly what you ask); Newer versions handle it as an explicitly disallowed transaction (and even if you rolled your own version that allowed it, no other clients would honor it).

So no, gaining control of Satoshi's private keys couldn't compromise the blockchain; they could at best spend his BTC starting from block #1.

Kinda makes me wonder about that initial founding block of bitcoins that has never been used, and if this person has necessary information to actually access that block, what the legal issues for that would be for both him and for that initial unused block.

What possible legal justification would the Australian government have to force someone to release information about someone else's legal private property?

In America you're supposed to be protected from this approach "We'll look around and then use what we find to prosecute you for something, whatever seems to fit." Though the media, interwebs and presidential candidates will destroy you at will, simply because they can.

If the government actually possessed that kind of efficiency we would have solved all the world's problems by now.

Err, not likely. The US government at least was made to be inefficient. Because they had a taste of how efficiently the king could levy taxes against them. Slowness in a 3 branch government is a designed in feature, not a bug.

...that a person who might be paranoid or greedy enough to try to cut the government out of his money, enough to try to invent a currency of his own, would also have tax issues with the government.I'm shocked, shocked to find that out!

On the other hand, in the United States, the people in charge of each Federal Reserve branch are government-appointed, and they are supposed to, in part, work toward the interests of the United States.

Persons in charge of a scrip like Bitcoin are not working in the interests of a national government to our knowledge, nor are they government appointed. If anything, they are working for themselves. They may have an altruistic streak about them, but they do not answer to anyone, nor are there even so much

It can be a little confusing considering the fact that the paper money is clearly marked "Federal Reserve Note".Even if the Federal Reserve bankers don't physically print money, they definitely "create" money. The physical cash is only a small percentage of the total money in circulation.When the Fed buys interest-bearing treasury securities from the U.S. government, the money is literally conjured from nothing. Pure profit for the banking cartel.

Yes yes. Ok I'll fix it and cover both. The Treasury Dept. prints money and mints coins. But now that everyone is done being pedantic I stand by my assertion that the Fed manages our banking system, it does not print money.

Competently set him on fire, assure an adequate supply of oxygen, shortage of flame repellants and other extinguishing devices or materials, prevent him jumping in a lake, restrict others from providing aid or other assistance and he'll be warm for the rest of his short, painful, miserable life.

Imagine if some pissed off neighbor or asshole co-worker reported to the IRS that you had four hundred million dollars' worth of undeclared capital gains.

FTFY.

Even boards like 4chan will respond to random requests to dox or raid someone with "Not your personal army." It's a shame the IRS (and other countries' revenue departments) can't rise to their standards of ethics.

You are confused between wealth tax and capital gains tax.https://en.wikipedia.org/wiki/Wealth_tax

Capital gains is only due when you sell something for more than you bought it. Wealth tax is an annual tax paid on your net worth, including property, shares, and potentially Bitcoin. Australia does not have a wealth tax.

Indeed that is absurd since the value can easily go to zero the next year. Is the government going to give you back all the taxes that you have paid in over the previous years of owning a stock that had gone up in value before dropping to zero. (Think Enron as a perfect example of what can happen with stocks that you own and haven't sold.)

The raid came the day after the Wired/Gizmodo revelations and the cops don't move that fast, so it's more likely we've heard of this guy because of the investigation, not vice versa.

Supposedly it's tax related.

I'd be wary of assuming he is Nakamoto for now, the Wired article raised a number of flags (notably that while much of the evidence tying Wright to Nakamoto is datestamped 2009, there's no evidence much of it actually existed until much later - ie it might have been planted in 2013/2014 with 2009

Because there are a lot of zeros involved. The creator supposedly holds a large amount of bitcoin mined early on and now it's worth a fortune; $400-$1000 million, depending on who you believe.

Authorities see all those zeros and all precedent and due process go straight out the window; instant door kicking time. You could offer them proof positive of an ISIS cell with a chemical weapon in a Sydney residence and they wouldn't move this fast.

Because that furthers the narrative that Bitcoins are a disruptive anti-entablishment technology that will free us from the oppressive tyranny of government, so that's what Bitcoin-loving sites like Slashdot will emphasize.

Really, it's because the authorities are going after anyone who is breaking the law. The Bitcoin creator is believed to have a few hundred million dollars' worth of coins, and converting that to a taxable asset without paying taxes is one form of unlawful tax evasion. If someone legitimat

Well either its an ex-employee whose a master hacker... or its a parallel construction thing.

NSA will have grabbed satoshi@vistomail.com emails, the email associated with Satoshi Nakamoto.It hands the emails to the Aussies (remember the illegal spook surveillance of Kim Dotcom of MegaUpload?).Now how do you explain how the Aussie police have private emails from a server of an unrelated person who has committed no determinable crime? This Satoshi Nakamoto figure?..... you leak the same emails to Gizmodo and Wired anonymously, and claim you received an anonymous tipoff.

It's likely this part (From Gizmodo):

"The hacker also provided a PDF file of what appears to be an unfinished draft of a legal contract between Wright and Kleiman forming a secret Bitcoin trust in the Seychelles, a notorious tax haven in the Indian Ocean. The contract shows Dave Kleiman in receipt of 1,100,111 bitcoin, to be repaid to Craig Wright on January 1, 2020. Several reports, including an oft-cited technical analysis by Bitcoin expert Sergio Demian Lerner, estimate Satoshi Nakamoto’s legendary Bitcoin fortune at around 1 million BTC — a figure that nearly matches the amount in the Seychelles trust. It also lists five PGP keys — files that are used to establish encrypted lines of communication over email — that will be used to manage the trust. Searching for those keys in a public database reveals that one belongs to Wright, one belongs to Kleiman, and two belong to Satoshi Nakamoto."

Interesting, but it still doesn't clarify any tax implications. Under U.S. law (not applicable in Australia, of course) bitcoin is taxable under capital gains law only when it's exchanged for something else of value. That doesn't appear to have happened in this case. Newly-mined bitcoin is also treatable as business revenue based on *bitcoin's price at the time the bitcoin was mined* which until Mt. Gox opened in July 2010, was measurable only at fixed-rate bitcoin exchanges such as New Liberty Standard

This is not Satoshi and he was not arrested for bitcoin related tax problems. Until someone wants to sign a message with Satoshi's PGP key or his well known private BTC key, then there's no reason to believe this is anything more than a hoax/prank.

Because it make a bunch of early adopters rich. Crypto Mining tends to be a ponzi ish scheme you mine the first realy easy ones then get people to spread the word as it gets harder. It is successful as people have been using it where CC are no longer taken (or they incorrectly think it can not be traced back to them when using a CC to purchase BC) so internet gambling sites, the silk road / it's successors, and the sex trade (advertising) seem to be the primary users.

I'm not sure either amounts to much, guess can go look at the block chain and find out. Wikileaks looks like a few k but I've not analyzed the 1k or so transactions to their donation address. Picking one random gambling site looks like more than a half million BTC have gone through at.5% in favor of the house that's sill 2.5k or so.

I can't say how it works where you are but in the US money has value because if you don't accept it as payment you'll find yourself in legal trouble. The government swinging its hammer is a persuasive force.

That's not quite true [stackexchange.com]. The US government does not force anyone to accept dollars as payments. If you want to open a barter shop and trade goats as your only form of "payment," you can do so.

What the government does say is the following:

(1) US money (dollars) is "legal tender" for all debts. That means if you already owe something to someone, legally you can repay that debt in dollars, and they must accept it. If you go to a store, you generally don't "owe debt" in advance. If you want to acquire go

The value of anything is how much other people think it's worth. A friend made a fortune importing Pokemon cards for sale to retailers even though he (and I) thought they were the stupidest things. They are just a few cents of cardboard with ink printed on them. But arrange that ink in a certain way so a bunch of people (rightly or wrongly) think it's valuable, and suddenly they're worth several dollars.

So even if you think bitcoins are stupid (I do), that doesn't mean they're worthless. They're worth what someone else is willing to pay for them, which is quite a lot.

On a more abstract level, that enough people value bitcoins enough to raise it to its current price does indicate substantial discontent with traditional financial systems. That's a real problem irrespective of whether or not bitcoins make sense.

and how is this different from the value of a specific green piece of paper we all agree has Value.but is basically just fancy paper?paper a bunch of people this is valuable.

that said, i hate buying pokemon cards for my son. he gets so excited about them and thinks they are so valuable because this one is a Mega or this one is an Ultra. Its just ink saying that. how does that provide value.

same can be said though for baseball cards, stamps, ART!, really so much in our economy.....

Wrong - you are conflating the ideas of value and price. Many people pay exorbitant prices for things with little value, or very little for things of high value. Toilet paper for example really doesn't cost that much but it sure has a huge value for you.

Value varies across people. Perhaps the pokemon cards enable one person to enjoy their time and be part of a certain social group, to another their just pieces of cardboard. Price can change due to a multitude of factors, and the value to a person is

To start: Fun. Then ease of use with the Silk Road. Now greed and willful ignorance.

Because honestly, Bitcoin doesn't work on any useful scale (3 transactions per second, maximum, globally!). And it doesn't do anything that needs doing - we have gift cards and wiring money. And what it does do, it does in such a difficult manner the average person could never use it, so it's easy to send your bitcoins to the wrong address and never see them again, or lose your 'wallet' and never see them again, or put t

Even if the government did want that desperately to raid the creator of bitcoin does anyone here believe they have the capability to organise, assemble and conduct a raid only a matter of hours after the creator of the bitcoins was supposedly "outed" in some obscure magazine? (And by obscure I mean not sanctioned by the Murdoch press).

The timing in this case clearly shows the matter is not related. There's a lot of ways to describe government agencies, police, taxation offices, and the feds in general but n

The potential mining aspect doesn't make much sense. Why would you go to great expense to try and mine bitcoins if you already have over a million of them? Or is anonymity that important to him that he doesn't dare spend the bitcoins associated with Satoshi Nakamoto?

That's one of the things that make the recent "leak" appear to be a hoax. It was suggested in comments for the previous story that his new found fame may protect him. I think not, but that hope is a possible motivation for perpetrating a hoax. And, by being a "leak" without any absolute statements, it gives him plausible deniability. Of course, it could also have been "leaked" by someone wishing to harm his reputation.

Regardless, he has every appearance of being a well-financed early adopter rather than the

The potential mining aspect doesn't make much sense. Why would you go to great expense to try and mine bitcoins if you already have over a million of them?

If this is true, I doubt he's mining much of anything. The Wired article contains a video which appears to be from a Bitcoin conference in October of this year where Wright appeared via Skype. He mentions that he currently has a computer in Iceland that is the 15th most powerful supercomputer in the world. He's not using that to mine bitcoins, he's using it to model the scalability of bitcoin. So, he's not going through the great expense to try and mine bitcoins, he's going through the great expense to model the system and see what's ahead. Maybe that is a direct result of the recent debate over the size of blocks. The additional power coming to his home could also be used for modeling, or it could be used for additional research or work unrelated to bitcoin. If this is a man with the kind of resources to set up a major supercomputer in Iceland to take advantage of the cheap electricity, I don't see any reason for him to run additional power to his house in Sydney for the purpose of mining bitcoins. That doesn't make sense. If mining was his goal then he would do it in Iceland, not metro Sydney.

The only reason I can figure you'd want/need to go 3 phase is if you are trying to run an 3 phase motor, or really needed lots of power for something like a server farm... Maybe he purchased a huge air compressor or arc welder? Obviously there was something industrial going on.

I'm not sure how you would be able to use enough power in your average residence to make 3 phase power desirable over the normal 2 phase. Even a modest server farm doesn't require it...

Its no wonder to me that he was using 3 phase. I got into bitcoin mining back in the day when the value of the bitcoins you could mine was more than the cost of electrictiy needed to do so.I bought a miner that has 2 power inputs that use about 1200 watts each. It draws so much power you can;t even run it in your average US house without splitting it over two different power circuits, or using 3 phase. Thats for just a single mining rig, so yeah I'd be more surprised if he wasn't on 3 phase.

Seriously, 3 phase is useless in a home unless you wish to run "industrial" equipment which is wired to accept it. If you are running industrial equipment in your house and think it's worth the cost of buying three phase electrical service over renting/buying/building actual industrial space, power to you... Quite literally... In the long term it seems better to just go get some industrial space and pass on rewiring your house, but that's just me I guess.

3-phase is pretty much standard in residential in Sweden. Stoves, washers and driers are usually 3-phase 400V. There are 1-phase 230V appliances as well, but the number of variants is lower and often limited to the cheaper variants.

I'm pretty sure that even in Sweden you only get 2 phase power by default, you just get it at twice the voltage and at 50 cycles. Truly 3-phase power is unnecessary unless you are running industrial machines with highly reactive loads and adds significant logistical issues because you have to keep the 3 phases in order or that motor will turn the wrong way. Don't be fooled by the number of conductors in the wall outlet, because usually they throw in a couple of extra wires for "common" and "Safety ground"

No, you are definitely wrong on that account. Since the mid 70's most installations in residential have been 3-phase using a 5-wire system, 3 wires for each phase, 1 for neutral and 1 for protective ground. You can't even get 2-phase system here, and if you were to ask for it you would be seen as being nuts. Only if you have a small studio apartment you may get 1-phase, but the power companies prefers to offer 3-phase to avoid balance problems in the net.

In the US, three phase power comes into a residential neighborhood or a large building (apartment complex, industrial site, etc.) and typically two of the three are distributed to individual residences -- giving you your regular mains and a high-voltage for a dryer and/or stove. The phases are rotated between the different residences -- so one unit gets A and B, the next B and C, the next C and A, the next A and B, etc.

I don't know much about how power is distributed, but the way you explain it doesn't sound exactly right to me. Homes get their power in the form of a 2-phase 120v system where the phases are 180 degrees apart. The two 120v circuits are split between the two phases. Any 240 volt appliances bridge the two 120v phases to generate the 240v needed.

The way you explain it, the power in homes would be 120 degrees apart, not 180 degrees, thus you wouldn't be able to generate the required 240 volts. What am I missin

Both of you are incorrect. The 120v system in the US isn't a 2-phase system, it is a 3 wire split single phase system. The two 120v lines are in phase, not 180 degrees out of phase, otherwise the two 120v lines would cancel each other out and you'd get 0V, not 240V.

Three-phase runs along the HV circuits and is stepped down by the pole-mounted distribution transformers. Each transformer is usually fed by one phase from the three and steps down from 13.8kV to 240V with a center tap, so you actually get 120V-

I can't comment on how normal it is but in Australia according to google the power is 240volt like Europe. I doubt they run power like they do in the US with 2 120 volt lines providing that 240 volts so I would wager that 3 phase is very very unlikely at a residence.

When you run 3-phase you have 230-240 V to ground, but about 400V between the phases. If it had been a 2-phase system then it would be almost 500V.

Many residential dwellings in Scandinavia actually runs 3-phase 400V, even 2 and 3 room apartments. And many appliances are available in more variants in 3-phase than in 1-phase.

Another reason for running 3-phase is that you will lower the current through the neutral wire causing less problems with ground currents.

And then we have the Norwegian 3-phase system with 230V between the phases and no neutral. But there's a historical reason for that - Norway have a lot of ground with high resistance where a neutral/ground wire don't work well.

Well, that's British, but look at other European countries that actually have modern standards you will see a difference. The UK is some 30 to 40 years behind on building standards where double-glazed windows are an add-on option in many buildings except the newest and many faucets still don't mix hot and cold water.

So why should they have a modern electric system? The British go their own way.

I would put it somewhere between usual and unusual. It's a little unusual in the inner city suburbs, which are populated by office types, but further out where working class guys have workshops in their garages, they are more common.